Can Social Media Replace Salespeople?

Alec Foege | Special to CNBC.com

Published 10:37 AM ET Mon, 19 Nov 2012
CNBC.com

Gaining customers has always been a social activity for businesses, but using online social networks to attract customers is a relatively new concept — and businesses say the strategy could add unimagined power to an organization's lead-generating operation.

Source: Spredfast.com

Marshaling social media networks such as Facebook, Twitter and Pinterest to talk to existing customers about a brand and to attract more fans is common practice.

But new companies have sprung up that offer sales organizations the ability to mine social networks for potential buyers, as well as dissatisfied customers of their competitors, and current customers who may be interested in additional offerings.

But the trick is to foster lead generation "without being too creepy," said Martin Schneider, who has published research on social customer acquisition and is vice president of marketing at cloud database provider Caspio.

While big cloud services providers such as Oracle, IBM and Adobe offer large companies social media intelligence, their main goal is marketing rather than acquiring customers.

Smaller firms are actually making more significant gains in analyzing data from a variety of social networks.

"It's really about directing the social web into your own database," said Mike Lewis, vice president of marketing and sales at Awareness Inc., a Burlington, Mass.-based social media marketing firm that offers clients a way to analyze social network profiles and score them based on relevance to their businesses.

"We have figured out how to handle any big data source."

Spredfast, an Austin, Texas-based company that specializes in building internal social platforms for large companies, takes a different approach. It links a company's employees' social accounts, then mines those accounts for external profiles that might be relevant to the sales team.

Spredfast's chief executive, Rod Favaron, said clients such as Jive Software have used his company's software to generate sales leads, harvesting data from its employees' corporate-based Twitter, Facebook and Instagram communities, which often contain links to prospects outside the company.

Source: Dachisgroup.com

"It's not unlike when firms send out mass emails," said Favaron. "They're driving trial downloads and other sales strategies, but with networks like Facebook, you can be much more targeted in your approach."

Firms that made their name in social media marketing are also getting into the customer acquisition game. Shoutlet — known for organizing online campaigns and sweepstakes for clients such as Rayovac batteries and Bare Essentials body products — is now developing business-to-business functions.

While Madison, Wis.-based Shoutlet is primarily focused on "building an industry's knowledge of their customers" through interactive online campaigns and promotions, it is expanding into customer acquisition, according to chief executive Jason Weaver.

Weaver said American Family Insurance uses Shoutlet to empower its sales force by sending potential leads gotten through social media to individual sales professionals. "They're also pushing pre-approved content down to sales agents" through social media, he said, such as updated guidelines for healthy eating that enhance the solutions they are presenting to new customers.

Weaver said Shoutlet is now pumping research dollars into the next phase of customer acquisition — expanding capability to mobile devices.

While most industry experts agree that data-gathering from social networks is a promising strategy, a question remains whether social media is the optimal tool for closing new business.

Jeff Dachis, chief executive of Dachis Group, a social marketing optimization firm, said "social is really an excellent vehicle for all sorts of engagement," but he is skeptical about its long-term feasibility as a customer acquisition tool.

"Social media alone will not get you those new customers," said Dachis, since existing solutions are basically a passive filter of information. "Real live salespeople will still have to follow up on those leads."

But Caspio's Schneider said today's social customer acquisition strategies are just the first step in a bigger shift in the way companies generate new business. "Sales was the last area of business in which social media is being employed," he said.

"I think the future is companies using tools that aren't Facebook," said Schneider, "but feel like Facebook."